Cisco is no stranger to virtualization, but sometimes its networks have been strangers to virtual machines (VMs). That's about to change as Cisco is expanding its overall datacenter strategy to be optimized for VMs on physical and virtual switches at regular and accelerated speeds.

Cisco (NASDAQ: CSCO) is rolling out a new virtual switch for VM traffic as well as a virtualization-enhanced offering for its Nexus switching lineup. The new releases from Cisco expand the networking giants' virtualization positioning, as the market for virtualization heats up with VMworld under way.

"The announcement we're making is around VM-aware or VM-optimized networking where the network is now is not just a cable or a black box," Deepak Munjal, Cisco's senior marketing manager for datacenter solutions,
told InternetNews.com. "It's very aware of the virtual machine environment that it plays in and is able to provide policy, features and management to enhance virtual machine capacity and capability."

Munjal argued that the basic building block of a datacenter is no longer the physical server but is rather the virtual one. Datacenter infrastructure needs to be optimized for the new reality and give virtual machines the same benefits as Cisco networks provide to physical machines.

The base technology is something called VN-link, which Munjal explained has the goal of virtualizing the network domain so that it can be applied to virtual machines. VN-link aims to abstract the physical infrastructure of the network, whether it's on the LAN side or the SAN side, and make it all transport to virtual machines as one unified fabric.

The Nexus 1000V is one such VN-link implementation from Cisco. The Nexus 1000V is something of a new animal for Cisco in that it is a virtual software switch for handling VM traffic. The general idea is to ensure that overall network policy for security and quality of service can be applied to virtual machine traffic.

On the hardware side, Cisco is rolling out the Nexus 5000 with VN-link technology as a an option as well. The Nexus product line was first announced by Cisco earlier this year as new switching platform with a new NX-OS operating system designed for creating a unified fabric for both LAN and SAN traffic.

Cisco is now also renaming its SAN-OS operating system to NX-OS, since they both share a common code base.
The Nexus 5000 was announced in April as a smaller box to Nexus 7000.

Going beyond just basic switching, Cisco's Data Center Interconnect (DCI) technology is an effort to enable VMs to move across datacenters, further expanding the mobility of virtualization.

Munjal also noted that Cisco's Wide Area Application Services (WAAS) application acceleration hardware would benefit from the new virtualization push. Earlier this year Cisco announced that WAAS would become VM-aware. Munjal claimed that Cisco WAAS can now compress VM traffic by as much as 60-70 percent.

Fundamentally Cisco's moves are all about making virtualization more transparent to the network, though virtual machines are somewhat different than physical machines.

"It's about visibility and making sure that the network has the visibility to understand that it's dealing with a virtual machine and also dealing with the mobility," Munjal said. "Physical servers don't move; once you put them in they stay in the rack and you can count on them. The virtual machine environment does not -- it is mobile and therefore you have to have a network that is intelligent enough to realize that VMs are moving."